• Revenue: $190 million, down 8% year-over-year.

• GAAP Gross Margin: 30%, Non-GAAP Gross Margin: 31%.

• GAAP Operating Margin: 2%, Non-GAAP Operating Margin: 5%.

• GAAP Net Loss: $0.01 per diluted share, Non-GAAP Net Earnings: $0.06 per diluted share.

• Cash Flow: Operations generated $10 million.

• Outlook: Q2 revenues expected to be between $195 million and $215 million, with Non-GAAP EPS between $0.10 and $0.30.

• Warning! GuruFocus has detected 5 Warning Sign with VREX.

On February 6, 2024, Varex Imaging Corp (NASDAQ:VREX) released its 8-K filing, detailing the financial outcomes for the first quarter of the fiscal year 2024. The company, a prominent innovator in X-ray imaging components, experienced a revenue decrease to $190 million, which aligns with the mid-point of their guidance but represents an 8% decline from the previous year.

Performance Overview

The Medical segment, which is Varex's primary revenue source, saw a 13% decrease in revenue year-over-year, dropping to $140 million. Conversely, the Industrial segment displayed resilience with a 10% increase to $50 million. The company's GAAP gross margin stood at 30%, with a slight increase in the non-GAAP gross margin to 31%. Operating margins on a GAAP basis were at 2%, while non-GAAP margins were higher at 5%. The GAAP net loss per diluted share was reported at $0.01, with non-GAAP net earnings at $0.06 per diluted share, a significant decrease from $0.21 in the same quarter of the previous year.

Financial Health and Future Outlook

Varex's cash flow from operations was $10 million, attributed to stable working capital management. The company's cash reserves, including cash equivalents, marketable securities, and CDs, remained steady at $195 million. Looking ahead, Varex anticipates revenues for the second quarter of fiscal year 2024 to be between $195 million and $215 million, with non-GAAP net earnings per diluted share expected to range from $0.10 to $0.30.

The company's balance sheet reflects a slight decrease in total assets from $1,249.6 million to $1,242.3 million. Current assets decreased marginally, while long-term debt remained relatively stable. Varex's stockholders' equity saw a minor increase, indicating a stable financial position despite the challenges faced in the quarter.

"Revenue of $190 million in the first quarter of fiscal 2024, was at the mid-point of our guidance, however unfavorable mix in both the Medical and Industrial segments impacted profitability," said Sunny Sanyal, Chief Executive Officer of Varex.